Industrial action threatens auto industry

There are fresh warnings
that the South African motor
manufacturing industry
could move offshore if
unions continue to use the
workplace as a battleground
for their fights against
the ruling party, or if
government does not provide
the necessary support.
It is often pointed out that
South Africa accounts for
less than one per cent of
global auto production – in
a scenario where global
capacity is around 28
million more units a year
than the industry can sell.
Two paragraphs in an
evaluation of BMW’s global
turnaround strategy by
SupplierBusiness bring this
starkly into focus.
Interestingly, in the case
of BMW, South Africa is
put in the same category as
China.
The report says BMW’s
expansion of its Rosslyn
plant in the face of global
belt tightening in 2008/2009
“happened because South
Africa’s exports are subject
to no import tariff to the
US, thus allowing BMW
interesting savings when
shipping vehicles produced
in South Africa to the US.
“On the other hand
Chinese operations,
currently running under a
joint venture with Brilliance
China, will receive greater
attention from BMW as
it considers making its
local plant an export hub
for the region. Production
output will rise from 37 000
vehicles in 2008 to 64 000
in 2012 for the 3 Series and
5 Series,” it says.
And concludes: “The
Chinese and South African
plants are expected to
account for not more than
6.5% of the car maker’s
total production by 2013,
which, notwithstanding the
increased interest by BMW,
outlines their minor role in
the overall manufacturing
plans of the car maker.”
This “minor role”
status will be of concern
to all those shippers and
transporters who rely on the
motor industry for the bulk
of their business.